NPR
By Erin Killian

Mortgage rates are falling, opening the door for potential homebuyers who have been afraid of the unstable real estate market and home owners looking to save on monthly payments.

For a 30-year fixed-rate mortgage, interest rates are now in the 5 percent range close to the lowest they've been in nearly two decades, according to weekly figures put out by the Mortgage Bankers Association. In June 2003, the rate hit 4.99 percent.

Due to the low rates, MBA reported Wednesday its largest increase in applications to refinance mortgages in its 18-year history of putting out the weekly report. Applications do not directly translate into loans, but consumers are clearly reaching out to their banks and brokers to lock in good deals.

What's more, the Treasury Department is weighing a plan for new homebuyers to push rates for 30-year fixed mortgages to 4.5 percent, down from the current 5.6 percent average, according to BankRate.com a move aimed at spurring investment in the foundering real estate market.

So is now the time to buy or refinance? Experts say that if you have enough equity in your house, it may be time to refinance. But if you're looking to buy especially in markets like San Diego or Washington, D.C., which saw some of the biggest price jumps during the housing boom it might be worth it to wait a few months. That's because even though interest rates are low, they're likely to stay low and housing prices continue to fall.

Why are mortgage rates falling?

Last week, Federal Reserve Chairman Ben Bernanke announced the agency would buy $500 billion worth of long-term securities to drive down yields on long-term Treasury bonds. The interest rate for a 30-year fixed-rate mortgage is typically in line with the yield on a 10-year Treasury note, so in response to the Fed's move, rates on mortgages began to fall to 5.5 percent and lower.

Are interest rates likely to drop further? Or should those looking to buy or refinance grab these low rates now?

For those interested in refinancing, consider this: Historically, 30-year mortgage rates have been about 150 basis points above the yield on the 10-year Treasury note. On Thursday, that yield was 2.57 percent. Add 150 basis points to that figure, and you would get a mortgage rate of 4.07 percent. But right now, the spread is closer to 300 basis points, with rates at 5.6 percent. That suggests that interest rates have further to fall to close the spread, says David Kittle, chairman of the Mortgage Bankers Association.

But even if rates do fall more, they are not likely to fall that much more, so it doesn't make sense to wait and see before refinancing, he argues. "If you get greedy over an eighth or a quarter [of a percentage point for interest rates], it always turns around and bites you," says Kittle, who is also executive vice president of Louisville, Ky.-based Vision Mortgage Capital.

"I don't see a downside to refinancing," adds Dean Baker, co-director for the Center for Economic and Policy Research in Washington, D.C., who warned about a housing crash years before it happened. He notes, however, that people whose houses have experienced steep drops in price may not have enough equity in their homes to refinance.

But when it comes to taking out a mortgage, Baker advises waiting to see how the Treasury's plan to lower interest rates as low as 4.5 percent shakes out. And he notes that the plan, if it happens, could also help push refinancing rates a bit lower, too.

So does that mean that now is the time to buy?

There are wide-ranging opinions on this.

The risk in buying a new house is that the market has not hit bottom. The U.S. is in a recession, and foreclosure rates continue to weigh down prices. If people can't pay their mortgages because they are losing their jobs, the supply of homes for sale will keep growing, putting a "downward pressure on prices," says Susan Wachter, professor of real estate and finance at the University of Pennsylvania's Wharton School of Business.

But even though no one knows when or where the market will hit bottom, Jack Guttentag, professor of finance emeritus at Wharton, thinks the bottom can't be too far away.

If you can get a house under market value, at historically low mortgage rates, it may be the time to buy, argues Kittle of the Mortgage Bankers Association.

The trick, of course, is figuring out what market value is in places such as Los Angeles and Florida, where housing prices have been falling by 3 percent a month, says Baker. He expects prices to plummet another 10 percent to 15 percent over the next year.

And it may be worth it to wait a bit more to see what happens with the Treasury's latest mortgage plan, he says.

Is it harder to qualify for a mortgage now?

Standards have tightened. In most cases, you have to prove that you can afford the monthly payment. That means you have to have a job, a decent credit score and the assets you say you have.

But you don't have to put down 20 percent of the purchase price if you don't have it some traditional banks will let you put down as little as 5 percent, says Guttentag; you just have to prove you have enough income to make your monthly payments. And if you're applying for a Federal Housing Authority loan, you can buy a house with a down payment of just 3 percent, though that will rise to 3.5 percent on Jan. 1.

The real question is whether it's worth it especially if you think house prices have much further to drop.

What if I am refinancing? What closing costs should I expect?

A general rule is closing costs for a refinanced mortgage will fall between $2,000 and $2,500.

If you closed your loan within the last one to five years, you should get the re-issue rate on your lender's title insurance, which can be up to a 70 percent discount, according to Kittle. That would be a $350 discount on a $500 lender title policy. But borrowers need to ask their title company or closing attorney specifically for this discount, because it's not illegal to charge the full price even if it is unethical, he says.

Are mortgage rates likely to stay low for a while?

Yes because there are many factors spoiling the economy.

"In some sense, for homebuyers, it's the best of times and the worst of times," says Guttentag, who writes the Mortgage Professor's Web Site. "It's the best of times because prices have come down. The other side of it is this option is available only to people who can qualify in the current market. Everything is more difficult right now.

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Your room and board- This one youll pay if youre staying on campus.  IF youre not staying on campus, youll most likely not have to pay as much as someone thats staying on the campus itself.  Staying on campus isnt cheap and in fact, sometimes it can almost double your tuition rates.
Your school supplies- College is no different than high school.  Youre going to need to buy school supplies such as your pencil, notebooks, pens and everything else youll need.  Some colleges may also require you to carry a laptop around.
Food- Everyone has to eat and whether youre living on campus or youre just going to stop by the cafe to study, youre most likely going to spend money on a sandwich and drink.  Do this five times a week and it adds up quickly.
Textbooks - A lot of college students go to college and not realize how much textbooks are going to be.  Depending on what major youre taking, youre looking at least a few hundred dollars per semester on college books.
Getting there - How are you going to get to college?  Are you going to drive?  Are you going to live there?  If you plan on driving, count on spending on gas, maintenance on your car and more.  Driving isnt cheap.
As you can see, college isnt cheap and when you look at your tuition, youre going to pay well more than just that.  So, if youre looking to budget out your college expenses, make sure you include all of these expenses that you may not think of.  They arent necessarily hidden expenses but rather expenses that you may not think about.

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A business (also called firm or an enterprise) is a legally recognized organizational entity designed to provide goods and/or services to consumers or corporate entities such as governments, charities or other businesses. Businesses are predominant in capitalist economies, most being privately owned and formed to earn profit to increase the wealth of owners. The owners and operators of a business have as one of their main objectives the receipt or generation of a financial return in exchange for work and acceptance of risk. Notable exceptions include cooperative businesses and state-owned enterprises. Socialistic systems involve either government, public, or worker ownership of most sizable businesses.

The etymology of "business" relates to the state of being busy either as an individual or society as a whole, doing commercially viable and profitable work. The term "business" has at least three usages, depending on the scope the singular usage (above) to mean a particular company or corporation, the generalized usage to refer to a particular market sector, such as "the music business" and compound forms such as agribusiness, or the broadest meaning to include all activity by the community of suppliers of goods and services. However, the exact definition of business, like much else in the philosophy of business, is a matter of debate.

Business Studies, the study of the management of individuals to maintain collective productivity in order to accomplish particular creative and productive goals (usually to generate profit), is taught as an academic subject in many schools.


Organizing a business

The major factors affecting how a business is organized are usually:

* The size and scope of the business, and its anticipated management and ownership. Generally a smaller business is more flexible, while larger businesses, or those with wider ownership or more formal structures, will usually tend to be organized as partnerships or (more commonly) corporations. In addition a business which wishes to raise money on a stock market or to be owned by a wide range of people will often be required to adopt a specific legal form to do so.
* The sector and country. Private profit making businesses are different from government owned bodies. In some countries, certain businesses are legally obliged to be organized certain ways.
* Limited liability. Corporations, limited liability partnerships, and other specific types of business organizations protect their owners from business failure by doing business under a separate legal entity with certain legal protections. In contrast, unincorporated businesses or persons working on their own are usually not so protected.
* Tax advantages. Different structures are treated differently in tax law, and may have advantages for this reason.
* Disclosure and compliance requirements. Different business structures may be required to make more or less information public (or reported to relevant authorities), and may be bound to comply with different rules and regulations.

Many businesses are operated through a separate entity such as a corporation, limited partnership or limited liability company. Most legal jurisdictions allow people to organize such an entity by filing certain charter documents with the relevant Secretary of State or equivalent and complying with certain other ongoing obligations. The relationships and legal rights of shareholders, limited partners, or members are governed partly by the charter documents and partly by the law of the jurisdiction where the entity is organized. Generally speaking, shareholders in a corporation, limited partners in a limited partnership, and members in a limited liability company are shielded from personal liability for the debts and obligations of the entity, which is legally treated as a separate "person." This means that unless there is misconduct, the owner's own possessions are strongly protected in law, if the business does not succeed.

Where two or more individuals own a business together but have failed to organize a more specialized form of vehicle, they will be treated as a general partnership. The terms of a partnership are partly governed by a partnership agreement if one is created, and partly by the law of the jurisdiction where the partnership is located. No paperwork or filing is necessary to create a partnership, and without an agreement, the relationships and legal rights of the partners will be entirely governed by the law of the jurisdiction where the partnership is located.

A single person who owns and runs a business is commonly known as a sole proprietor, whether he or she owns it directly or through a formally organized entity.

A few relevant factors to consider in deciding how to operate a business include:

1. General partners in a partnership (other than a limited liability partnership), plus anyone who personally owns and operates a business without creating a separate legal entity, are personally liable for the debts and obligations of the business.
2. Generally, corporations are required to pay tax just like "real" people. In some tax systems, this can give rise to so-called double taxation, because first the corporation pays tax on the profit, and then when the corporation distributes its profits to its owners, individuals have to include dividends in their income when they complete their personal tax returns, at which point a second layer of income tax is imposed.
3. In most countries, there are laws which treat small corporations differently than large ones. They may be exempt from certain legal filing requirements or labor laws, have simplified procedures in specialized areas, and have simplified, advantageous, or slightly different tax treatment.
4. In order to "go public" (sometimes called IPO) -- which basically means to allow a part of the business to be owned by a wider range of investors or the public in general -- you must organize a separate entity, which is usually required to comply with a tighter set of laws and procedures. Most public entities are corporations that have sold shares, but increasingly there are also public LLCs that sell units (sometimes also called shares), and other more exotic entities as well (for example, REITs in the USA, Unit Trusts in the UK). However, you cannot take a general partnership "public."

Commercial law

Most commercial transactions are governed by a very detailed and well-established body of rules that have evolved over a very long period of time, it being the case that governing trade and commerce was a strong driving force in the creation of law and courts in Western civilization.

As for other laws that regulate or impact businesses, in many countries it is all but impossible to chronicle them all in a single reference source. There are laws governing treatment of labor and generally relations with employees, safety and protection issues (OSHA or Health and Safety), anti-discrimination laws (age, gender, disabilities, race, and in some jurisdictions, sexual orientation), minimum wage laws, union laws, workers compensation laws, and annual vacation or working hours time.

In some specialized businesses, there may also be licenses required, either due to special laws that govern entry into certain trades, occupations or professions, which may require special education, or by local governments who just want your money. Professions that require special licenses run the gamut from law and medicine to flying airplanes to selling liquor to radio broadcasting to selling investment securities to selling used cars to roofing. Local jurisdictions may also require special licenses and taxes just to operate a business without regard to the type of business involved.

Some businesses are subject to ongoing special regulation. These industries include, for example, public utilities, investment securities, banking, insurance, broadcasting, aviation, and health care providers. Environmental regulations are also very complex and can impact many kinds of businesses in unexpected ways.

Capital

When businesses need to raise money (called 'capital'), more laws come into play. A highly complex set of laws and regulations govern the offer and sale of investment securities (the means of raising money) in most Western countries. These regulations can require disclosure of a lot of specific financial and other information about the business and give buyers certain remedies. Because "securities" is a very broad term, most investment transactions will be potentially subject to these laws, unless a special exemption is available.

Capital may be raised through private means, by public offer (IPO) on a stock exchange, or in many other ways. Major stock exchanges include the New York Stock Exchange and Nasdaq (USA), the London Stock Exchange (UK), the Tokyo Stock Exchange (Japan), and so on. Most countries with capital markets have at least one.

Business that have gone "public" are subject to extremely detailed and complicated regulation about their internal governance (such as how executive officers' compensation is determined) and when and how information is disclosed to the public and their shareholders. In the United States, these regulations are primarily implemented and enforced by the United States Securities and Exchange Commission (SEC). Other Western nations have comparable regulatory bodies.

As noted at the beginning, it is impossible to enumerate all of the types of laws and regulations that impact on business today. In fact, these laws have become so numerous and complex, that no business lawyer can learn them all, forcing increasing specialization among corporate attorneys. It is not unheard of for teams of 5 to 10 attorneys to be required to handle certain kinds of corporate transactions, due to the sprawling nature of modern regulation. Commercial law spans general corporate law, employment and labor law, healthcare law, securities law, MA law (who specialize in acquisitions), tax law, ERISA law (ERISA in the United States governs employee benefit plans), food and drug regulatory law, intellectual property law (specializing in copyrights, patents, trademarks and such), telecommunications law, and more.

In Thailand, for example, it is necessary to register a particular amount of capital for each employee, and pay a fee to the government for the amount of capital registered. There is no legal requirement to prove that this capital actually exists, the only requirement is to pay the fee. Overall, processes like this are detrimental to the development and GDP of a country, but often exist in "feudal" developing countries.

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